The Trump administration's "Made in America" initiative has taken another step forward, this time targeting Taiwan, a global semiconductor powerhouse. The U.S. Commerce Department announced on Thursday...AnnounceThe United States has signed a trade agreement worth hundreds of billions of dollars with Taiwan, which will help boost the country's domestic semiconductor manufacturing capabilities. Under the agreement, Taiwanese semiconductor and technology companies have agreed to make $2500 billion in direct investment in the U.S. semiconductor industry, covering semiconductors, energy, and AI manufacturing and innovation.
In addition to investment, we are also increasing credit guarantees.
In addition to the aforementioned $2500 billion in direct investment, the U.S. Department of Commerce indicated that Taiwan will provide an additional $2500 billion in credit guarantees to support further investments by these semiconductor and technology companies. However, the official press release has not yet specified a concrete timeline for the implementation of this massive investment.
Taiwan currently produces more than half of the world's semiconductors, and this agreement demonstrates the United States' strong determination to bring this supply chain back to its homeland.
In exchange: US investment in Taiwan's defense and AI
This is a typical Trumpian deal. In return, the U.S. pledged to invest in Taiwan's semiconductor, defense, artificial intelligence (AI), telecommunications, and biotechnology industries. However, unlike Taiwan's explicit commitment to a certain amount, the U.S. press release did not specify how much money the U.S. would invest.
Trump's calculations: Tariffs are the stick to come.
The day before this announcement, the Trump administration had just released a statement reiterating its goal of bringing semiconductor manufacturing back to the United States and acknowledging that it would be a long process, given that only 10% of semiconductors are currently manufactured in the U.S.
The announcement stated bluntly: "Reliance on foreign supply chains is a significant economic and national security risk," and emphasized that disruptions to import-dependent supply chains would severely impact U.S. industrial and military capabilities.
It is worth noting that the announcement also stipulated a 25% tariff on certain advanced AI chips and explicitly stated that additional semiconductor tariffs would be imposed once trade negotiations with other countries (such as the one involving Taiwan) are completed. In other words, this investment agreement is likely a "pledge of allegiance" by Taiwanese companies to avoid potentially high tariffs in the future.
Analysis of viewpoints
This deal, totaling a staggering $5000 billion (investment + guarantees), is of an astonishing scale.
From the Trump administration's perspective, this perfectly aligns with its "transactional diplomacy" logic: using promises of defense and technology cooperation to secure the "armed defection" of Taiwan's supply chain, thus addressing the issues of hollowing out of US manufacturing and national security risks. For Taiwanese tech companies like TSMC, facing the impending 25% tariff on AI chips, expanding investment in the US seems to have become an unavoidable path.
This is not just a business investment, but also a geopolitical calculation. The United States wants "production capacity," while Taiwan wants "security" (defense commitment). However, as Taiwan's core semiconductor manufacturing capabilities are transferred to the United States on a large scale, will the protective effectiveness of what was originally known as the "silicon shield" be diluted? This will be a key point that Taiwan's technology industry needs to carefully observe in the coming years.
